Displaying items by tag: Democratic Republic of Congo

Uganda: Local cement producers are facing challenges meeting the specification required for cement being used by the Standard Gauge Railway (SGR) project. Project coordinator Kasingye Kyamugambi said at a procurement conference in Kampala that the project was facing issues with cement, reinforcement steel and sand, according to the Daily Monitor newspaper. Hima Cement is producing one specific product for the project following discussions with the SGR. However, the railway needs eight different types of cement.

Kyamugambi has called for legal cover for the infrastructure project to bypass local product sourcing laws. He has asked that new legislation be introduced to cover projects with a lifecycle of over a century.

The SGR is being built by China’s China Harbour Engineering Company. The project is intended to link up to Kenya’s railway project at Tororo with proposed links to Rwanda and South Sudan. The Democratic Republic of Congo has also expressed interested in the line.

Democratic Republic of Congo: South Africa’s PPC says it is talks with China National Materials (Sinoma) over selling a majority stake in its operations in the country. In an interview with Bloomberg chief executive officer Johann Claassen said that deal would depend on the price and implications on the on-going merger between Sinoma and China National Building Material (CNBM). He added that the PPC’s cement plant in the Democratic Republic of Congo had proven ‘challenging’ and that the company had arranged a ‘debt holiday’ with lenders after the market ‘didn’t pan out as envisaged.’

Democratic Republic of Congo: South Africa’s PPC has agreed with its lenders to reschedule debts from the construction of a cement plant in Democratic Republic of Congo (DRC). The cement producer said that the total capital requirements for the DRC plant will now be limited to interest payments from January 2018 until January 2020, according to Reuters. The debt renegotiation has included an extension of the repayment period by an additional two years and a change to the interest rate.

PPC Barnet DRC is 69% owned by PPC, 21% owned by Barnet Group and the remaining 10% is owned by the International Finance Corporation (IFC). The plant is 60% debt funded by the IFC and Eastern and Southern African Trade and Development Bank.

Uganda: Three new cement plants or upgrades to existing plants opening in 2018 are expected to dwarf local demand. Hima Cement, a subsidiary of LafargeHolcim, plans to open a new 1Mt/yr grinding plant at Nyakesi, Tororo Cement is expanding its plant to 3Mt/yr and Kenya's National Cement is building a plant at Mbale, according to the Ugandan Independent newspaper. Following completion of the three projects local production capacity will rise to 6.8Mt/yr from 3.6Mt/yr. Local demand is 2.4Mt/yr.

Cement industry executives are expecting growth in the construction industry as the government starts infrastructure projects in the oil and gas sector. The cement producers also expect export markets to support local production capacity growth, particularly in South Sudan, western Kenya and eastern Democratic Republic of Congo.

News from the Democratic Republic of the Congo (DRC) this week: Lucky Cement has nearly finished its new 1.2Mt/yr cement plant. The US$270m project is due to start commercial operation in October 2016, according to a report by Bloomberg. The news is fascinating because it marks the opening up of central sub-Saharan Africa to the cement industry and it puts the boots of Pakistan’s Lucky Cement on the African continent in a big way.

The Nyumba Ya Akiba plant is a 50:50 joint venture between Lucky Cement and a local conglomerate Groupe Rawji, with financing supplied from a group of international development agencies. Originally proposed in 2013 the plant is located in Kongo Central province in the far west of the country between Kinshasa and the port of Matadi near to the connecting main road and railway line. The kit for the plant was ordered from FLSmidth in 2014 for Euro68m, including crushers, pyro processing equipment and vertical mills for raw meal, coal and cement grinding. An overview from the International Finance Corporation also added that the plant intended to cut a deal to import South African coal via the railway from the coast. Limestone and clay will come from a captive quarry. Incidentally, FLSmidth reckoned in 2015 that the project was the first new cement plant in the country in 40 years.

From Lucky Cement’s perspective the project makes sense given the bad reaction it has had trying to import its cement into western and southern Africa. Local producers recoiled from cheap imports along the coast and then lobbied their governments to block them. So, putting down manufacturing roots in a target country with a local partner makes it that much harder to block additional imports. It may or may not be importing its own clinker from somewhere else to supplement local demand but it is definitely providing local jobs and supporting local development. Lucky Cement’s previous international adventure of this kind was the opening of a cement grinding plant in Iraq in 2014.

Naturally, like buses, one waits ages for a cement plant to be built and then two turn up at the same time. South Africa’s PPC is also building an integrated cement plant in the DRC at Kimpese, in the same province as Lucky Cement’s plant. PPC’s half year report to March 2016, released in September 2016, mentioned that its 1Mt/yr plant was 83% complete with all civic and structural work complete. Commissioning was intended for the end of 2016 with cement ready for sale in early 2017. It is being built by Sinoma. The cement producer already has a sales depot in Kinshasa and it exports 32.5N and 42.5N cement from South Africa to the territory. Given PPC’s falling revenues from cement in South Africa and growing revenue elsewhere in Africa the opening of this plant will be keenly awaited.

The local demographics may answer whether the DRC can support two new cement plants. The country’s cement consumption was just 24kg/capita with a gross domestic product (GDP) per capita of US$490 in 2015. These are some of the smallest figures in the world. A feasibility study ahead of the Nyumba Ya Akiba plant estimated that the country would have a demand of 1.8Mt/yr by 2015 compared to a local production capacity of under 1Mt/yr. Nature, and markets, abhor a vacuum. Lucky Cement and PPC are about to fill it.